EKIP– Expert Club for Economics and Politics A Different Opinion
As part of the “How Bulgarians Save” initiative, a new economic index was introduced – the Wealth Index, which measures the wealth of households in Bulgaria. The index combines all types of financial wealth with a new methodology for assessing real estate, aiming to more accurately reflect the real economic value of assets owned by Bulgarian citizens. The Index’s starting value is 100 points in 2015, with its gross value reaching 262 points by the end of 2024.
The press conference was attended by EKIP economist Stoyan Panchev and TAVEX investment expert and CEO Max Baklayan, who presented the main results of the analysis. According to the data, by the end of 2024, the gross wealth of households in Bulgaria will exceed 1 trillion leva for the first time, reaching 1.00052 trillion leva. In nominal terms, this is equivalent to almost five times the size of the country's gross domestic product, or 493% of GDP. On average, there are 155,424 leva per capita, and 349,135 leva per household. For the same year, the total gross wealth of households increased by 113 billion leva, which represents a growth of 12.7%. The value of housing alone increased by 95.5 billion leva, or 15.7% compared to the previous year.
In the long term, for the period between 2015 and 2024, a significant increase in accumulated wealth is reported. Total gross household wealth increased by BGN 618 billion, which represents a 2.7-fold increase. The value of the housing stock increased by BGN 446 billion or 174%, while gross financial wealth increased by BGN 172 billion, which is a growth of 138%. When liabilities are subtracted, the net growth in financial wealth amounts to BGN 138 billion.
“ The study draws important conclusions regarding the structure of wealth in the country. About 70% of it is concentrated in real estate, while only 1.1% is invested in other assets. This highlights a serious potential for the development of investment culture in our country. At the same time, a previous study from the same campaign shows that only 22% of Bulgarians have the habit of saving, and only 6% of them invest, which means that only 1.3% of the population actively participates in the investment markets,” shared Max Baklayan.
Experts also drew attention to the fact that after 2021, inflationary processes begin to significantly affect the real value of accumulated wealth, with nominal values increasingly reflecting the purchasing power of assets. “ In addition, the dominant weight of real estate in household portfolios poses a potential risk to financial stability in the event of a repeat of scenarios similar to the 2008 crisis,” added Stoyan Panchev.
The introduction of the new index marks an important step towards a deeper understanding of the economic situation of households and sets the stage for a public debate on the need for better management of personal finances.
You can read the full text of our analysis at this link.
Link to the presentation with data from the index: Wealth of Bulgarians Index
